Management of External Resources - Essay Example

Academia Academia Research 15 April 2006 Management of External Resources Today's world is so different than the past, the growing competitionand hunger for success has changed the perceptions of every individual, due to modernization the people who were underestimated previously now know their importance and true value, it is because of this increased awareness that people of today's world have understood the importance of their technical know how, as a result the entire system has moved towards a balance which means that the work is now done by keeping in view each others importance, the idea is to work in a unified manner as if there would be slight unbalancing than both the parties would not find it comfortable to work with each other, in this essay the emphasis is on the management of relations with the external resources or management of the external resources with in a project. The management of the external resources has turned these days extremely important, if this section would be overlooked in a particular project than there are several negative outcomes such as the supplier and subcontractors would look for their benefits, they would save extra costs and make their own gains, they would provide relatively cheap and poor quality material for the manufacturing or completion of the project and they would fill their pockets from the remaining money which they got from the company to finish the job at a good standard, so these might be the outcomes of the poor relationship management with the subcontractors. The outcome of such poor relationships and communication with the suppliers and subcontractors is that they start looking to take advantage for their business rather than for the project they have been chosen to work on, so in order to ensure that the suppliers and subcontractors are working for the benefit of the company or project the relationship and communication should be emphasized more. The relationships with the suppliers and subcontractors can be improved by working jointly for one goal, it is the managements job to ensure that the supplier or subcontractor is working for maintaining a long term relationship with the company or is very much devoted to the project that is undergoing, the changing attitude of the supplier is a hint that he wants to either end the relationship or is willing to get some more benefits from the company, in such circumstances it is the job of the management to ask the supplier about the problems they are facing, a very good idea about maintaining a very good relationship with the suppliers that is commonly seen in the successful companies is that the managers of those companies know every thing about the suppliers, they know their backgrounds, their history of working and even the names of their children, this is a very good technique to maintain healthy relationships with the supplier, as the supplier would now pay attention to the particular company and would take interest in its operations as they would see that the company is also taking interest in their personal life. In modern times it is so commonly found that the companies are paying bonuses to the suppliers and else they are providing them with complimentary gifts such as air tickets for spending the holidays outside the country and also many other rewards are given to them to ensure that they all are working for the benefit of the company, one can say that it is not a relationship of love but it is a relationship of need, both of them are dependent on each other. It is also seen that there are many companies that are having problems in making payments to the suppliers, they usually cause a lot of bad debts in the suppliers or subcontractors accounts, as a result supplier either stops supplying the raw material or subcontractor stops working on the project or the supplier brings in the name of the company in bad customers list. To avoid this happening the company has few choices, again it is the management's job to clear all the billings of the supplier and secondly if the company has caused bad debts than they should try to pay back the money and also should ensure that such thing would never happen in the future, if nothing can be done than the company would have to find a new supplier which is very difficult to maintain as it would be a new relationship. "In almost all relationships there will be disputes & wrangles. The Project Manager should have developed a good relationship with the management of major suppliers so that problems can be settled rapidly without becoming contractual disputes. There is a natural tension between you, the customer, wishing to get the most benefit from the deal and the supplier who will wish to maximize profits. Normally you can agree a reasonable compromise before calling the lawyers" (sub-contractor management, during the project). This means that all the company needs to do is compromise, it is not just limited to the company but the supplier would also be compromising up till some extent, there is a term in Marketing known as VMS (Vertical Marketing Systems) which means that the Producer, Wholesaler and Retailer all of them work jointly so that no one else takes benefit from them, as the customers are the only ones who take more benefits from such poor relationships between the producer and supplier, so the idea is to work jointly so that all of them work for the benefit of each other and all three of them somehow manage to charge higher from the customer rather than getting vulnerable in front of the buyer's buying power. "The project managers' responsibility is to ensure the proper direction of the project at all times. It's their duty to keep all project members on track and make sure communication is taking place on all levels. They will have to communicate with upper management, with the development teams, and with the end users. They will also have to make sure relevant communication is had between development and end users. Isolating developers from the user's wish lists is leaving too much to interpretation"(boxes and Arrows). The next issue arising for the companies is the communication problem which is even bigger than the relationship problem, the communication plays a very important role as without communication it would be impossible for the supplier or subcontractor to complete the job, there are various issues arising in communication, such as the vertical communication problem, it means that the communication's direction would be both upwards and downwards between the top executives and the suppliers or subcontractors, the problem is that the communication would travel downwards from top executive to suppliers in a way that the top executives would write a letter (for instance) than it would travel all the way from top to the bottom staff and than to the suppliers and when the suppliers would answer than the same problem would occur, and by the time the communication would be completed the point of issue would have gone late or no immediate action would be taken on it as the communication process took a lot of time for completion, so they need to do a very simple thing that they should introduce an open door policy and also should emphasize on the horizontal communication, which means that all the employees and external resources would have the permission to enter the top executive's door and answer to what ever the question might be also the top executives can question directly to any one so that no further time is wasted and an immediate action can be taken on the prevailing problem. "Communication is the key. Isolating any one section from the other is harmful to a project at best. Each of the project management, development, and end user groups must learn effective communication before any can begin to work together. Even if the end users never meet the developers, both must know how to ask the proper questions so projects don't go unused or used improperly"(Boxes and Arrows). This does not only end here, but the communication's importance can be identified from the point that the entire result of the projet or any job is based on communication which means that because of communication the company is able to get the feedback from the suppliers or subcontractors, it includes all the current happening in the project and also the transactions taking place, if all these things are not kept in view than the company can face a heavy loss as getting dependent entirely on the supplier and subcontractors can be very risky. There are several other barriers to effective communication that company has to remove for the purpose of clarifying its objectives to the supplier or subcontractor, the barriers such as personal biases which could have some real disastruous outcome as the top management may consider a particular supplier or subcontractor to be dishonest and there is a possibility that they do not take any notice of what ever the supplier or subcontractor is saying, or it may be vise versa, this all is implying that in order to do business or start a project there must be good relationships and understanding between the company and the suppliers or subcontractors, also one can not do successful business transactions untill and unless one has the trust on the other person, of course there are numerous things that should be taken good care of while trusting some one else. In the modern days it has been seen that the non verbal communication makes a lot of difference in the communication between the two of the parties as changing facial expressions and poses give clear ideas about the other's mind which forces one of the parties to suddenly change their offer or command, usually big companies do not take notice of such acts as this can really disturb their relations with the suppliers and sub contractors, so the idea is to suggest the companies to remain aware of such acts as this can change the demands and needs of both of these parties, which should not happen although some amount of compromisation would definitely happen in any case whether the company takes notice or not, but over all it should be kept in mind that the communication needs to be very effective as it is directly related to the well being of business. "A major source of problem in communication is defensiveness. Effective communicators are aware that defensiveness is a typical response in a work situation especially when negative information or criticism is involved. Be aware that defensiveness is common, particularly with subordinates when you are dealing with a problem. Try to make adjustments to compensate for the likely defensiveness. Realize that when people feel threatened they will try to protect themselves; this is natural. This defensiveness can take the form of aggression, anger, competitiveness, avoidance among other responses" (Developing Communication Skills). So to sum up all the happenings the relationship is based on the communication and the communication is based on the relationship between the company and the suppliers and subcontractors, in order to work effecively both need each others support and both have to understand each others objectives, of course no body sacrifices for some one else, keeping this point in mind both of these parties should work for each other while taking care of the personal and the other's objectives, in the past decades it was difficult to maintain good relationships between these two parties as there were big differences in the status of both the companies and the suppliers or subcontractors, as there were very limited number of companies, the loss was only one sided that is suppliers were the only one to face loss but as th competition grew and the number of companies increased so much and the world reached the industrialization stage, the suppliers understood their importance and now the greater loss is still one sided but it is on the side of the companies, so the companies have to take care of such small issues. Work Cited & Other Sources *SubContractor Management, During The Project, < http://www.epmbook.com/sub.htm>. *Boxes and Arrows, . *Developing Communication Skills, . *Kotler, P., "Marketing Management". (n.p.): Prentice-Hall, 1999. Read More